AngloGold plans quick reduction in Ashanti''s gold hedging

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NEW YORK, Aug. 4 (Reuters) -- South Africa's AngloGold Ltd.
on Monday said Ashanti Goldfields' top shareholder agreed to
support its $1.1 billion acquisition of the African mining
company but the transaction's fate still rests with the
government of Ghana.

The merger, formally unveiled on Monday after being publicly
proposed in May, would, if approved, bring AngloGold
neck-and-neck with rival Newmont Mining Corp. as the world's
top gold producer, and bolster the company's long-term reserves
by more than 30 percent.

That reality moved one step closer on Monday when Lonmin
Plc, a 27.6 percent stakeholder in Ashanti, pledged to vote in
favor of the transaction, which would pay Ashanti shareholders
0.26 AngloGold share for each share they own.

Ashanti's board has also approved the deal, but the companies
now must await a ruling from the Ghana government, which
owns a 17 percent stake in Ashanti as well as a golden share
giving it the ability to veto a takeover of the company.

quot;We remain very optimistic that we are the right partner and
the government of Ghana is going to come to that view,quot; said
Bobby Godsell, AngloGold's chief executive officer, in an
interview. quot;Nothing in our talks with the government has
caused us to have anything but a very positive view of the
deal and a very optimistic view about its outcome.quot;

Godsell said they expect Ghana to complete its review of
the transaction by mid-September. The government initially
said it expected its review to be completed by the end of
June, but there has been no announcement since that time.

Ghana officials have pressed AngloGold to improve its offer,
which valued Ashanti at $8.36 per share based on Friday's
closing prices, a source told Reuters last week. Ashanti's
U.S.-listed shares closed at $8.12 on Monday.

Godsell declined to comment on the specifics of the
negotiations.

Combined, AngloGold and Ashanti produce about 7.3 million
ounces of gold annually -- a level matched only by Newmont.

The two company's would also boast the world's largest
proven gold reserves at 93.2 million ounces, a figure that
could climb even further as AngloGold brings its
deep-mining technology to Ashanti's mines.

quot;If you have reserve strength, you really are in a position to
be in a dominant position going forward,quot; Godsell said.
quot;Probably the single central challenge in the gold mining
industry is to find minable answers three to six years
down the road.

quot;They bring a number of long-life mines with lots of reserves
for the future.quot;

Once completed, AngloGold projects the transaction would
add to its earnings per share, excluding unrealized
non-hedge derivatives. The exact increase is dependent on
where the gold market is when the deal closes, the company
said.

The transaction is also expected to generate synergies of
$15 million per year before transaction expenses.

AngloGold shareholders would own 87 percent of the combined
company, and the company's board has agreed to recommend
a name change to AngloGold Ashanti Ltd. should the deal be
completed. AngloGold's top shareholder, Anglo American Plc,
has agreed to support the name change.